Meeting_Body
CONSTRUCTION COMMITTEE
AUGUST 18, 2022
Subject
SUBJECT: EAST SAN FERNANDO VALLEY LIGHT RAIL TRANSIT PROJECT, PUBLIC PRIVATE PARTNERSHIP FOR SOLAR PANELS AT MAINTENANCE AND STORAGE FACILITY
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
CONSIDER:
A. AUTHORIZING the Chief Executive Officer (CEO) to award and execute a public-private partnership (P3) Contract No. PS84743000, East San Fernando Valley Light Rail Maintenance and Storage Facility Solar and Energy Storage System Public Private Partnership, for a maximum duration of 15 years, with PCS Energy LLC pursuant to Public Utilities Code Section 130242, in the amount of $1,063,190, for Phase 1 (Preconstruction design services) subject to the resolution of any timely protest(s), if any. Pricing for Phase 2 (Finance, design, supply, installation, and commissioning) and Phase 3 (Monitor systems performance and oversight of Metro O&M activities) will be negotiated in the future with a not to exceed margin percentage of 10% and 12%, respectively; and
B. ESTABLISHING Contract Modification Authority (CMA) for 10% of the not-to-exceed contract award value and authorizing the CEO to execute individual Contract Modifications within the CCMA and within the project budget authorization.
Issue
ISSUE
Pursuant to Public Utilities Code Section 130242, and with Board approval on October 28, 2021, staff solicited competitive proposals to use a P3 procurement method as an alternative delivery project method to design, build and finance a solar panel system at the maintenance and storage facility (MSF) for the East San Fernando Valley (ESFV) Light Rail Transit Project (Project). This P3 contract satisfies a federal Expedited Project Delivery Grant requirement for a P3 component to be integrated within the overall Project.
Background
BACKGROUND
The Project is a light rail system that will extend north from the Van Nuys Metro G-Line station to the Sylmar/San Fernando Metrolink Station, a total of 9.2 miles with 14 at-grade stations. The Metro Board certified the Final Environmental Impact Report on December 3, 2020. The Project achieved a Record of Decision on January 29, 2021. Included in the Project environmental document was the initial operating segment (IOS) defined as the southern 6.7 miles of the Project alignment. The IOS is street running in the middle of Van Nuys Boulevard and includes 11 at-grade stations along with the maintenance facility. The final design for select advanced utility relocations is also being advanced. The Project includes an MSF that covers approximately 21-acres and includes several buildings that are an opportunity to implement a solar photovoltaic (PV) power system.
As the IOS was cleared and the design has advanced, the IOS portion of the Project is proceeding into the next phase of final design and construction, and the procurement process for a Progressive Design Build Contractor began in the Summer of 2022. The remaining northern 2.5-mile environmentally cleared segment is going through additional analysis as directed by the Board in December 2020 and is not included in the IOS.
In April 2021, the Board approved the ESFV Project as a priority for pursuing a grant from the Federal Transit Administration (FTA) Expedited Project Delivery (EPD) Pilot Program. In May 2022, the FTA agreed that the Project is eligible for a grant of up to $908.7 million. The federal grant requires a P3 component to be included as part of the Project. In addition to meeting the requirements of the EPD Grant and helping to achieve sustainability objectives, this P3 contract will provide an opportunity for Metro to engage with the private sector to manage cost, schedule, and performance of the PV power system over a long-term contract.
DISCUSSION
PCS Energy LLC, was selected for recommendation following the competitive P3 procurement process to provide the funds (including finance charges) for the capital costs, and be responsible for the design, procurement and installation of the solar panels, battery energy storage system and related infrastructure. Metro will use the power generated by the PV system to provide an estimated 70% of the electrical requirement for the MSF on an annual basis. Excess power not used will be stored and could provide power when weather or seasonal variability impacts solar exposure. Availability payments for the P3 contractor will include scheduled payments over the life of the contract for the capital cost and for oversight and assistance for operations and maintenance of the PV system. Availability payments will also be based on requirements for system performance, efficiency, and reliability.
Per available heat assessment data, the San Fernando Valley experiences maximum temperatures upwards of 20°F hotter than other parts of Los Angeles, and the number of days above 95°F (extreme heat days) is at least 5 times that of other, more coastal areas of the region. Metro will use the power generated by the PV system to provide an estimated 70% of the electrical requirement for the MSF on an annual basis, to ultimately operate and maintain the fleet and system, including during extreme heat or other high-energy demand events. Excess power not used will be stored and could provide power when weather or seasonal variability impacts solar exposure. The PV system will assist in California’s Flex Alert when high temperatures threaten California's electric grid. The PV system will also help conserve energy when demand for power could outstrip supply, which generally occurs during heat waves when electrical demand is at its highest.
Metro Union employees will perform operations and maintenance of the PV power system under current Metro Labor Agreements. However, the P3 contractor will work with Metro Operations to provide protocols, procedures, and guidance to oversee and assure the PV system continues to meet performance metrics over the life of the contract.
Metro’s experience with this type of contract has been successful on the Metro Support Services Center (MSSC) Solar Energy & Energy Conservation Equipment Project - A Public/Private Partnership, where a similar P3 contract was used for the contractor to design and install the PV system, and Metro Labor forces provided the operations and maintenance under Metro Labor Agreements. Under the Services Center P3 contract, the contractor also provided professional guidance and training for operations and maintenance of the PV system over a long-term contract.
In addition to a price factor, the competitive solicitation included evaluation criteria structured to facilitate the selection of a qualified proposer with experience in design and construction of PV power systems, experienced technical and management personnel, demonstrated experience with third-party permitting and approvals, and proven strategies for implementing a collaborative approach.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
This Board action will have no adverse impacts on safety standards for Metro. The contract provisions require P3 team members to follow the direction of the Metro construction safety policies and procedures to ensure that safety is the highest priority during oversight of all phases of construction.
Financial_Impact
FINANCIAL IMPACT
This Project is funded on a fiscal year basis under Project number 865521 East San Fernando Valley Light Rail Transit Corridor, cost center 8510, under various accounts including Professional/Technical Services and $248,236,500 is included in the FY23 Adopted Budget. This is a multi-year project requiring expenditure authorizations in fiscal year increments until a Board Authorized Life of Project Budget is adopted. It is the responsibility of the Cost Center Manager, Project Manager and Chief Program Management Officer to budget for this project in the future fiscal years.
Impact to Budget
There are no impacts to the FY 23 Budget. In the future, there may be a small impact during the term of the P3 agreement to Operations eligible funding as Metro would be responsible for the operations and maintenance of the solar panels and battery energy storage system. Annual O&M costs and availability payments will be budgeted in future fiscal years.
Equity_Platform
EQUITY PLATFORM
To ensure maximum opportunity for participation on this contract, Metro staff performed extensive outreach to the small business community, including those within the Disadvantaged Business Enterprise (DBE) community. The solicitation was advertised through periodicals of general circulation (i. e., Asian Journal, LA Daily News, La Opinion, and LA Sentinel), posted on Metro’s Vendor Portal, and an e-mail notice to small businesses with applicable NAICS codes. Also, a virtual Industry Outreach Event was held on December 3, 2021. The Proposal Evaluation Team was comprised of department personnel that was gender diverse. The selected firm made a DBE commitment of 8.94%. This commitment exceeds the DEOD recommended goal of 5%.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The Project supports the following strategic goals:
Strategic Goal 1: Provide high-quality mobility options that enable people to spend less time traveling. The purpose of the Project is to provide high-capacity transit service in the San Fernando Valley.
Strategic Goal 2: Deliver outstanding trip experiences for all users of the transportation system.
The at-grade light rail system will attract bus ridership and improve the trip experience for users of the transportation system.
Strategic Goal 3: Enhance communities and lives through mobility and access to opportunity. With 11 stations, including connections to Metro G-Line and Metrolink, the ESFV enhances mobility to the community.
Strategic Goal 4: Transform LA County through regional collaboration and national leadership. Collaboration with the elected officials, citizens, and Metro patrons of San Fernando Valley continues to positively impact the Project.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Metro Board may reject the recommended action and direct staff to pursue a capital construction project to be designed and built by Metro. Staff does not recommend this approach, as alternatives that do not include a P3 component would impact the submitted EPD grant application. With the EPD Program funded on a first come/first-serve basis, and with limited funding authorized and appropriated by Congress, staff recommends utilizing the P3 contracting method for the Maintenance and Storage Facility Solar Panels for the ESFV Project.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute Contract No. PS84743000 with PCS Energy LLC for the East San Fernando Valley Light Rail Maintenance and Storage Facility Solar and Energy Storage System Public Private Partnership.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - DEOD Summary
Prepared_by
Prepared by:
Monica Born, Deputy Executive Officer, Program Management, (562) 524-0597
Debra Avila, Deputy Chief, Vendor/Contract Management Officer, (213) 418-3051
Reviewed_By
Reviewed by:
Bryan Pennington, Chief Program Management Officer (213) 922-7557
James Dela Loza, Chief Planning Officer (213) 922-3038
Sharon Gookin, Deputy Chief Executive Officer (213) 922-418-3101
